The following appeared in a memorandum from the assistant manager of Pageturner Books:
“Over the past two years, Pageturner’s profits have decreased by 5 percent, even though we have added a popular café as well as a music section selling CDs and tapes. At the same time, we have experienced an increase in the theft of merchandise. We should therefore follow the example of Thoreau Books, which increased its profits after putting copies of its most frequently stolen books on a high shelf behind the payment counter. By doing likewise with copies of the titles that our staff reported stolen last year, we too can increase profitability.” Discuss how well reasoned . . . etc.
The author of above statement is giving some suggestions to Pageturner Books so that it can increase profitability. After analysis I don't think that these suggestions are valid. Additional data and numerical figures are required to make a correct decision.
First of all, from the statement it seems to be that Pageturner Books was expecting profit over the period of past two years. But in that same time frame Pageturner Books started café as well as a music section. These added facilities seem to be costly and they must have incurred heavy investment. Moreover the author hasn't provided reasons for adding these new facilities. If the statement provides the supporting data such as example of another store which added these facilities and maximized its profit or details of several customer requests which asked for these facilities then it will enforce the hidden meaning that these facilities were added with the intent of earning profit. The author also needs to make it clear that whether the entire investment in these facilities is being considered while calculating mentioned loss in profits. If profit calculations are done in that manner then Pageturner Books shouldn't worry a lot about loss. Pageturner Books can expect to have gradual increase in profit as the investment in new facilities will get paid gradually.
Secondly, the author has given example of Thoreau Books. The author is trying to say that the relation between methodology applied by Thoreau Books and profits boost is causation type. But it could be that the actual relationship is just random correlation. The profit could have been completely due to some other efforts which were implemented by Thoreau Books in the same time. In addition, even if one assumes the causation type of relationship, the author is suggesting that Pageturner Books should keep "copies of the titles that staff reported stolen last year". This seems to be inconsistent with the overall idea. Titles which were stolen last year are not required to be in demand this year. Perhaps chances are that new titles or some other titles will experience the demand and those might get stolen this year.
Thirdly, it will be also helpful if the author gives dollar amount of loss due to books thefts. If this figure is huge then the management might consider installing new security systems.
To summarize, I think that the author needs to provide additional data. The data as mentioned in above paragraphs will also enable to discover actual problem and will enable management to take the correct decision. In the absence of above mentioned data management could take wrong decisions which could affect the Pageturner Books adversely.
“Over the past two years, Pageturner’s profits have decreased by 5 percent, even though we have added a popular café as well as a music section selling CDs and tapes. At the same time, we have experienced an increase in the theft of merchandise. We should therefore follow the example of Thoreau Books, which increased its profits after putting copies of its most frequently stolen books on a high shelf behind the payment counter. By doing likewise with copies of the titles that our staff reported stolen last year, we too can increase profitability.” Discuss how well reasoned . . . etc.
The author of above statement is giving some suggestions to Pageturner Books so that it can increase profitability. After analysis I don't think that these suggestions are valid. Additional data and numerical figures are required to make a correct decision.
First of all, from the statement it seems to be that Pageturner Books was expecting profit over the period of past two years. But in that same time frame Pageturner Books started café as well as a music section. These added facilities seem to be costly and they must have incurred heavy investment. Moreover the author hasn't provided reasons for adding these new facilities. If the statement provides the supporting data such as example of another store which added these facilities and maximized its profit or details of several customer requests which asked for these facilities then it will enforce the hidden meaning that these facilities were added with the intent of earning profit. The author also needs to make it clear that whether the entire investment in these facilities is being considered while calculating mentioned loss in profits. If profit calculations are done in that manner then Pageturner Books shouldn't worry a lot about loss. Pageturner Books can expect to have gradual increase in profit as the investment in new facilities will get paid gradually.
Secondly, the author has given example of Thoreau Books. The author is trying to say that the relation between methodology applied by Thoreau Books and profits boost is causation type. But it could be that the actual relationship is just random correlation. The profit could have been completely due to some other efforts which were implemented by Thoreau Books in the same time. In addition, even if one assumes the causation type of relationship, the author is suggesting that Pageturner Books should keep "copies of the titles that staff reported stolen last year". This seems to be inconsistent with the overall idea. Titles which were stolen last year are not required to be in demand this year. Perhaps chances are that new titles or some other titles will experience the demand and those might get stolen this year.
Thirdly, it will be also helpful if the author gives dollar amount of loss due to books thefts. If this figure is huge then the management might consider installing new security systems.
To summarize, I think that the author needs to provide additional data. The data as mentioned in above paragraphs will also enable to discover actual problem and will enable management to take the correct decision. In the absence of above mentioned data management could take wrong decisions which could affect the Pageturner Books adversely.
